How to Turn Your Home into a Business Location
So you want your own home to be your working space as well – or you’re planning of buying a home and turning it into one. Now that’s a sound plan. Many active startups and small businesses as well as sole proprietors and contractors actually operate a business at or from their own homes.
Your home can be transformed into a base of operation of businesses such as hairdressing, consultancy, trading, online business and many more. So, what do you need before you can legitimately work from home?
Licences and Registrations
Make sure that your home is a good/suitable location, especially if you will have clients visiting. If you’re planning to purchase a new property for the sole use of business operation, there are NPBS feature-rich fixed rate home loans to jumpstart yourhome business project.
Some home-based business require specific licences or registrations, and a council planning permit. You can know more by visiting the Australian Business License and Information Service. You may also contact your local council to get advice about planning permit and other applicable local requirements.
Insuring a Home-Based Business
Many people working from home falsely believe that since they are operating from home, they believe that they are sufficiently covered by a domestic Home and Contents insurance policy. You can never be so sure, so it pays to find the right insurance for your business.
Home-Based Business Tax Deductions
There are generally two kinds of deductible expenses, occupancy and running expenses. The Australian Tax Office (ATO) lets you claim these two types of expense typically associated with running your home.If you will set a specific area, then you can claim both, if you don’t, then you can only claim a running expense.
Your home-based business running costs include utilities (electricity, water, gas, etc.), consumables, phones costs and cleaning. Home-based business occupancy expenses, on the other hand includes rent, insurance premiums, mortgage interest, council rates, etc. These information are also available on the ATO website.
Capital Gains Tax Consideration
Know that if you will use a part of your home for a business, you may have to pay capital gains tax when you put the home on sale, even if you didn’t claim any deductions for occupancy costs and mortgage interest when you operated the business.
Land Tax Liability
Your home-based business may also be subject to the payment of land tax to the local State Revenue Office. View more information from the State Revenue Office website itself.
Contact Information Requirements for Your Business
You need to give contact information to your clients, suppliers receipts and all invoices. If you won’t have any clients or customers visiting your home, then don’t provide a home address.
- PO Box. You can set up a post office box or locked bag with Australia Post.You can also get paid notification service through Aus Post.
- Private mailbox. If you don’t want to use a PO Box as your address, you can just use a street number instead.
- Phone line. Your business might need an extra phone line for taking business calls. Using a separate phone line helps in keeping business costs separate for reporting and taxes.